What if an audit reveals a shortfall in Tether's reserves?
An audit revealing a Tether reserve shortfall is the maximal stablecoin tail: ETH/BTC gap down hard, MSTR/COIN crater, and pricing liquidity itself seizes since USDT is the dominant settlement asset. The behavioral rhyme is the Mar-2023 USDC depeg and 2018 USDT discount scares, scaled up. Forward angle: a genuine reserve hole has no clean precedent at this size — the contagion runs through offshore exchange solvency and perp funding, so the second-order venue/credit risk dwarfs the headline spot drop.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 1–3 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a mixed shock. An audit reveals a Tether reserve shortfall, shaking stablecoin confidence. The trigger decomposes into signed root‑shocks — Crypto confidence ▼ — which propagate through our causal graph to the markets below.